Universal Music Group jumped in its stock market debut
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Universal Music Group jumped in its stock market debut. Shares of the company, which was spun off from French media group Vivendi, leapt 36% from their reference price. Shares of Vivendi fell 13% after the spin-off and listing of Universal Music Group, for years its crown jewel that accounted for the lion's share of revenue growth. Vivendi distributed a 59.87% stake in Universal as a special dividend to shareholders, leaving it with a 10.13% holding in the record label. The distribution will leave Vivendi with pay-TV business Canal+ Group, ad-holding firm Havas and publishing company Editis as its main businesses. As planned, the shares of Universal Music Group N.V. (UMG) started trading on the regulated market of Euronext Amsterdam today. Given their opening price of EUR25.25, Vivendi (Paris:VIV) confirms that the distribution in kind of UMG shares to Vivendi shareholders will be paid as planned on the basis of one UMG share for every eligible Vivendi share. The detachment date (ex-date) of the distribution in kind is today. Settlement will occur on September 23, 2021. The total value of the distribution in kind combines: A EUR5,312 million (EUR4.89 per Vivendi share) special dividend in kind paid out of existing reserves, approved by the shareholders of Vivendi on June 22, 2021; As well as a EUR22,098 million (EUR20.36 per Vivendi share) special interim dividend in kind paid out of June 30, 2021 earnings, upon decision of the Management Board of Vivendi made on September 14, 2021.
On Tuesday, the Swiss stock market made up a small part of its previous day's losses. The SMI gained 0.2 per cent to 11,789 points. Among the 20 SMI stocks, there were 14 price gainers and six price losers. 37.43 (previously: 65.57) million shares were traded. The strongest performer in the SMI was Partners Group (+3.1%). The company had reported in the morning that it had received capital commitments of 15 billion dollars for its fourth private equity buyout programme. Banking stocks, which had been sold off in a near panic on Monday, again lagged the broader market. Credit Suisse fell 0.8 per cent and UBS lost 1.3 per cent. The shares of luxury goods groups Richemont (-0.7%) and Swatch (-1.5%), which are heavily dependent on business in China, also fell further. The share price of cement manufacturer Holcim fell by 1.6 per cent. Shares in the construction sector could also be affected by a default by Evergrande. Otherwise, investors went for defensive stocks such as heavyweight Nestle (+0.8%), but also Givaudan (+1.1%) and Swisscom (+0.3%). Insurers also recovered slightly. Swiss Life, Swiss Re and Zurich gained between 0.1 and 0.5 per cent.
European shares recovered some equilibrium Tuesday, following the previous session's heavy losses. Investors fretted in the last trading session over the implications of the potential failure of China Evergrande-the world's most indebted property developer. Investors are closely watching the Federal for clues as to how and when the central bank will begin slowing, or tapering, its Covid-19 pandemic-era program of monthly asset purchases, which add liquidity to markets. The Stoxx Europe 600 index rose by 1% to 458.7 points. In Paris, the CAC 40 and SBF 120 gained 1.5% and 1.4%, respectively. In Frankfurt, the DAX 40 was up 1.4% and the FTSE 100 in London increased by 1%. Airlines, miners and oil stocks were among the biggest pan-European risers Tuesday. Shares in Stagecoach jumped more than 20% after the bus company said it was in talks about an all-share takeover by rival National Express. Its shares also rose 8.2%. Sixt stock extended its advance, rising another 2.2% after Monday's 7% gain. This after the German car-rental company had raised its forecast for the current year as the development of the summer vacation in Europe and the U.S. was better than it had initially planned for. Third-quarter revenue at the German car-rental company is expected at EUR741 million, M.M. Warburg said, which would mark a 60% increase compared with 2020 but would still be slightly lower than the same quarter in 2019. There could be further upside to 2021 estimates, however, and the recent lifting of U.S. restrictions on vaccinated travelers from Europe could further support Sixt's fourth-quarter performance. Royal Dutch Shell (+3.6% in London) has reached an agreement to sell all its assets in the Permian Basin in the US to ConocoPhillips (+3.2% on Wall Street) for around $9.5bn in cash.
U.S. stocks ended mixed in a choppy trading session after fears about China’s property sector helped fuel a broad and punishing selloff at the start of the week. The Dow Jones Industrial Average fell 50.63 points, or 0.1%, to 33919.84, giving up earlier gains. The S&P 500 retreated 3.54 points, or 0.1%, to 4354.19 and the Nasdaq Composite advanced 32.49 points, or 0.2%, to 14746.40. Both indexes had suffered their biggest one-day pullback since May on Monday. Even those who feel stocks will be able to continue rising expect a bumpier stretch over the next few months. Federal Reserve officials kicked off a two-day monetary policy meeting Tuesday that will be scrutinized by investors for insight into the central bank’s plans for its bond purchases and interest rates. Many investors credit much of the stock market’s recovery from the pandemic-fueled downturn to extraordinary levels of support from the Fed, as well as fiscal stimulus. Earnings and deal news drove swings among individual stocks Tuesday. Homebuilder Lennar slipped 53 cents, or 0.5%, to $97.77 after missing analysts’ sales expectations for the latest quarter, citing supply-chain challenges that show no sign of easing. U.S. Bancorp shares jumped $1.42, or 2.6%, to $57.10 after the lender said it had agreed to buy MUFG Union Bank, which operates about 300 branches mainly on the West Coast, for about $8 billion.
Most of the stock exchanges in East Asia are down in the middle of the week. There is no trading in Hong Kong and Seoul due to public holidays. The Shanghai Composite lost 0.3 per cent after the holiday break. China Evergrande shares dropped another 0.4%, taking its year-to-date decline to almost 85%. The Nikkei-225 closed down 0.7 per cent in Tokyo. The Bank of Japan (BoJ) continues to maintain its ultra-loose monetary policy.
As U.S. stocks stabilized, government bond prices retreated. The yield on the 10-year U.S. Treasury note rose to 1.323% from 1.308% Monday. The yield on the German Bund with the same maturity was -0.322%, down from -0.318% on Monday evening.
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